The Indian rupee opens flat is set to come under mild pressure at Wednesday's open with investors focused on whether the central bank will deliver its first rate hike in more than three years and how it plans to manage surplus banking system liquidity. All eyes will be on the Reserve Bank of India at 10:00 a.m. local time on Wednesday. A Reuters poll showed 35 of 61 economists expect the RBI to raise its repo rate by 25 basis points on Wednesday, while 26 expect no change. Swap markets indicate ?a 25-basis-point hike is fully priced and are leaving some room for a larger 50-basis-point move. The US dollar remained lower on Wednesday after stress in European bond markets abated and as eyes turned to the release of Federal Reserve minutes and speeches by its policymakers for signals on a potential rate hike. The euro surged by the most in seven weeks in the prior session as French bond yields slid after the frontrunner in next spring's presidential election outlined plans to slash spending. The yen weakened even after a dovish Bank of Japan board member said she would support interest rate increases. The dollar index , which measures the greenback against a basket of currencies, rose 0.03% to 101.94, following a 0.27% slide in the prior session. The euro eased 0.08% to $1.1249. The Japanese yen weakened 0.19% against the greenback to 158.43 per dollar. Sterling dipped 0.08% to $1.3262. Yesterday, the US equity market touched record highs supported by optimism over earnings outlook and some stabilization in global bond yields. The stabilization in yields was helped by a moderation in crude oil prices. The US 3-year Treasury auction yesterday for USD 58 bn also drew stable demand, with bid-to-cover ratio at 2.62. . Today, the focus shifts to the FOMC minutes from the September policy meeting, which should offer further clarity on the Fed's rate trajectory. Brent crude oil traded below USD 100 pb as rising Middle Eastern crude exports and a G-7 emergency stockpile release eased supply concerns. However, Brent crude oil inched higher during the Asian trade today to trade at USD 101.53 pb on reports of further escalation in tensions in the Middle East. Gold prices slipped on Wednesday as investors looked to minutes from the US Federal Reserve's September meeting for indications on whether policymakers remain inclined to raise rates further. Spot gold eased 0.3% to $4,150.23 per ounce by 0145 GMT. US gold futures edged 0.2% lower to $4,177.60. Spot silver fell roughly 1% to $61.12, platinum rose 0.2% to $1,704.25, while palladium lost ?0.3% to $1,168.20.
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The euro rebounded on Tuesday and was on pace for its strongest move higher in a month after falling to its lowest in 17 months in the prior day, as a pullback in French government bond yields cooled fears about strain in euro zone debt markets. The euro zone's currency climbed 0.28%, on track for its biggest daily gain since September 3, at $1.1252. the currency had slid to its lowest since May 2025 on Monday at $1.116, following a drop of more than 1% in the prior week, its fourth straight weekly decline. The dollar index , which measures the greenback against a basket of currencies, fell 0.26% to 101.89 and was on pace for its biggest daily drop since September 25. Bond markets around the world have seen yields rise due to expectations of sharp central bank rate hikes as energy prices have jumped due to the US-Israeli war with Iran and fanned inflation, as well as concerns about government finances. France is at the heart of the European market concerns. The French government is seeking to enact an unpopular 2027 budget to lower its deficit and contain its record-high debt load, a tall order in a deeply divided parliament as political factions position ahead of next year's presidential election. With inflation already rising on soaring energy costs and higher yields increasing household and corporate borrowing costs, further euro weakening could leave the European Central Bank caught between fighting inflation and calming bond markets.
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